Blog » Jobs and Structural Change Blog Series: by Dino Merotto
In the Jobs Group we want the operational response to the JET agenda across countries to take account of empirics from country jobs diagnostics and global jobs measurement. We want priority operations and scaled up jobs lending to prioritize solutions that take account of the economics of growth and structural change. Specifically, we want theses blogs and a publication which will follow them, to offer:
Our findings re-affirm earlier empirical literature of structural change from around the 1940s through the 1970s, which was closely tied to economic theories of growth and development. Colin Clark (1940), Simon Kuznets (1963), Moshe Syrquin and Hollis Chenery (1975), each noted how patterns of consumption, production and employment change as countries get richer. These early works stressed the importance to structural change of demand (changing patterns of consumption and net trade), of capital and labor endowments, demographics, technology and related to it, openness to trade and capital. They underscored the importance of manufacturing to the process of structural transformation.
Structural change is back in vogue, and academics are re-investigating the drivers of observed patterns across countries and in countries over time, with important implications for strategies for Jobs and Economic Transformation. Diao, McMillan, & Rodrik (2017) look at differences in regional drivers of structural change in East Asia, Latin America and Africa. Comin, Lashkari, & Mestieri, 2018 model sectoral income elasticities, capital intensities and rates of technological progress, concluding that changes in income and consumption patterns account for 80 percent of changes in structural change. On the supply side, some authors following Rodrik (2015) such as Newfarmer, Page and Tarp (2018) have identify tradeable services as possible alternatives to offset “premature de-industrialization”, whereas Haraguchi, Cheng, & Smeets, 2017 re-emphasize the importance of manufacturing, noting that the observed patterns of premature deindustrialization are due not to changes in specific factors in manufacturing, but to the concentration of global manufacturing activities in specific countries.
With a view to supporting an evidence base for country jobs strategies, our blog series will continue to review the empirics of jobs and structural change.